Sunday, December 10, 2006

Toddling toward tax reform

In the abstract, I like Gov. Bob Riley's idea of raising Alabama's annual income tax threshold for a family of four from $12,500 to $15,000. It'd be another positive step toward reforming a broken state tax system that has punished the poor for decades and that set the threshold at an abominably low $4,600 just a year ago.

Before final approval, though, I'd like to know that the state will get enough tax revenue elsewhere to counterbalance the loss of education funds that such a cut would cause. Riley's office says the Education Trust Fund's annual revenues must increase by at least 3 percent before any tax cuts take effect, though I'm unsure whether that amount is enough to cover inflation. I'd welcome guidance from anyone with more knowledge on the subject.

Alabama's tax system ultimately needs a full-fledged overhaul, not just some scattered improvements, to make it stabler and less punitive toward the poor. But as The Tuscaloosa News observes today, Riley at least deserves credit for focusing his tax-cutting efforts on Alabamians at the bottom and middle of the income spectrum. Baby steps are better than no steps at all.

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